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Corporate Decisions
Determine the corporate structure of your business.
Working with your attorney and CPA, you can decide what type of corporation or legal entity your pharmacy business will be. Determine if there are other legal decisions that need to be made and what their impact will be on your business — both now and in the future.
Naming the corporation is another important aspect of this process. Many businesses have two names: a corporate name that is the business’s legally registered name; and a “doing business as” (DBA), which is how the public knows the business. As an example, Health Mart Systems, Inc.®, a pharmacy franchise operated by McKesson, recommends that franchisees establish both a corporate name and a DBA.
Health Mart recommends this two-name structure to protect both the independent pharmacy and Health Mart. Additionally, the pharmacy should not include “Health Mart” in its corporation’s name for these reasons:
- By not having Health Mart in the corporate name, it is very clear that there is no structural or ownership relationship between the pharmacy and Health Mart Systems, Inc.
- Should the pharmacy decide to terminate the franchise agreement with Health Mart, the owner would need to file a corporate name change with the state’s department or agency of corporations, which can be expensive and time-consuming. On the other hand, changing a DBA is very simple.
Another of the important business basics is setting finance and accounting practices for your pharmacy. This will give you a strong financial platform from which to build your operation.